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The Future of Work in the Distribution Industry

The logistics and distribution industry, like others, is undergoing a digital transformation ― both in logistics management and workforce management. As the world rapidly changes, and we are faced with evolving health-related challenges like COVID-19, the distribution industry continuously tries to keep up. Forward-thinking companies that leverage proven human capital management (HCM) technology are sprinting ahead of their competition.

AI-driven robots, autonomous self-driving trucks, and delivery drones, capabilities that were once thought of as the distant future, are now in the early stages of use. There are numerous practical applications of future-focused technology that can help handle today’s distribution challenges, including growing customer service expectations, rising labor costs, and omnichannel complexities. Advanced technologies can help optimize employee engagement and productivity, support informed decision making, and create operational efficiencies.

Benefits of Improved Technology

Technology may soon provide better employment opportunities for those working in the logistics and distribution industry. Technology will bring opportunities for higher wages and more interesting work as well as eliminate work considered “dirty, dangerous, and dull.” In the Harvard Business Review’s The Future of Work Is Now study, results indicate that “robotics and artificial intelligence (AI) algorithms will increasingly handle the hard or repetitive tasks humans can’t or don’t want to do, while simultaneously equipping them with instant access to information and insights for the higher-value activities that remain.”

Despite these enormous tech-related opportunities, at least one-third of warehouses in the U.S. continue to operate using spreadsheets and paper-based processes, and of the two-thirds that use warehouse management systems to track inventory and coordinate order processing, some have not upgraded their solution in years.

Incorrectly Perceived Negative Impact on Job Opportunities

Artificial intelligence (AI), machine learning (ML) robotics, automation. These terms often have a negative connotation for workers. This is generally a misconception. In fact, across all industries, “AI created about three times as many jobs as it destroyed in 2018,” according to the ZipRecruiter Future of Work Report. One example can be seen in the trucking industry. The total number of trucking-related jobs will actually increase as technology and automation advance, says Alex Rodrigues, CEO of Embark, on an episode of the RoadSigns podcast. Autonomous trucks are well-suited for predictable, long-distance highway routes, but are not adapted for local roads, poor weather driving, and fueling of the truck. This creates the need for additional truck-related jobs, with the benefit of workers being closer to home and away from their loved ones for less time, leading to improved engagement and reduced turnover. Combine this with the increase of the Amazon effect, where customers expect nearly instant delivery, especially during health pandemics like COVID-19, and it’s clear that automation and improved technologies will help deliver a better experience for both employees and consumers.

Employee Engagement and Tangible ROI

Considering that the average cost of replacing a warehouse employee can be $7,000, about 25% of a typical warehouse worker salary (and some experts estimate the real cost to be 150% of salary), retaining these employees should be a key focus of logistics organizations.

Easier said than done. One example is the importance of managers remembering employees’ preferred shifts when creating schedules. This can have a ripple effect if scheduled employees don’t show up for an unplanned shift because of external conflicts they can’t avoid. Finding replacements can be difficult and coworkers must then pick up the slack, which can impact their job satisfaction and productivity as well as the timely delivery of goods to customers. Advanced HCM technology can help logistics organizations overcome this challenge, amongst numerous others.

Discretionary effort, which is the level of effort employees give that goes beyond the minimum required, increases exponentially when employees feel valued and engaged.

4 Ways to improve performance and employee engagement

Mobile

Giving distribution industry employees access to an HCM mobile app enables them to view their schedules and pay information, check their accrual balances, and request time off on their mobile devices at the warehouse and when they are on the go

Shift swapping

AI shift-swap recommendations take into account an organization’s work rules while employees’ shift preferences derived from ML help further define shift-swap opportunities

Wearable tech

Some devices designed specifically for logistics workers track high-risk motions and deliver this data to a dashboard to help managers understand the safety risks that workers face so the count of injuries can be reduced

PUTTING FUTURE OF WORK APPLICATIONS TO USE TODAY

Technology that was once thought of as decades away is now being utilized across the distribution industry. Although additional future advancements are all but certain, logistics and distribution organizations can implement the strategies discussed in this white paper for wide-ranging operational benefits. By employing advanced HCM technologies now, they can utilize mobile technology to achieve productivity gains and enhanced employee engagement, leverage real-time analytics to support informed decision making, and use AI and ML technologies to optimize scheduling to both demand and worker preferences. For the logistics and distribution industry, the future of work is happening now.

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Author

Matthew Dowling
Industry Marketing Manager, Services & Distribution

Matt Dowling is an industry marketing professional with a passion for helping clients better manage and engage their workforce. In his role, Matt focuses on the Services & Distribution vertical at Kronos, working with customers and partners to share strategies and tactics on how to stay relevant in a challenging, ever-changing landscape.